Rising rents unrealistic
UAE, 9 Jul 2005
GO TO any social gathering these days - the talk invariably veers around rising rents, and how it has become impossible now for middle income expats to stay with their families. Several of them have already sent their families back home and moved into smaller, sharing apartments, while others are in the process of doing so.
For all you know, this September may see smaller numbers of people coming back from their vacations, as many of them may have left their families behind. A survey conducted by GulfTalent only confirms our worst fears - rents have gone up by 26 per cent in the UAE this year. That is, if you were paying Dh20,000 annually for a two-bedroom apartment in Sharjah, you would be paying over Dh25,000 now for the same apartment. Now consider the increase in salaries - a pathetic 1.5 per cent in the private sector. That is, if you were drawing Dh60,000 per annum last year, your salary raise would be just Dh900 a year - or a mere Dh75 per month on Dh5,000. No wonder people are sending their families back home!
It's not just the hike in rents that is bothering the middle class, it is the hike in everything that makes family life possible in the UAE - cost of provisions, children's school fee (apart from rents, that eats a major chunk of your salary), cost of entertainment, children's uniform, books etc. In the long run, the soaring rents which have no basis in reality (Demand and supply? Give us a break!) will inevitably affect the economy, as fewer people will mean less spending and far less disposable income will mean cutting down on all frills - entertainment, eating out, travel etc. A hike which is simply based on greed cannot sustain itself for very long. What else can you call it but a bubble which has to burst? Think about it!